Concerns over impairments hit HCI stocks on JSE

A list of companies under Hosken Consolidated Investments. SUPPLIED.

A list of companies under Hosken Consolidated Investments. SUPPLIED.

Published May 24, 2024


SHARES in Hosken Consolidated Investments (HCI) closed 1% weaker after yesterday’s trade session on the JSE amid concerns over impairments suffered from its attempted exposure in oil exploration.

HCI had eased by 1.04% to R171.62 by the close of yesterday’s trade session. The company’s stock is down by up to 4.71% in the past seven days.

This sharply contrasts with the company’s performance on the JSE earlier this month.

HCI was among the best-performing stocks on the JSE on May 14 when it surged by 4.37% to R182 per share.

This followed its announcement early this week that it had been impacted by equity losses amounting to R528 million in relation to Impact Oil and Gas.

This included an effective R483m impairment in respect of its investment in Africa Energy Corp (AEC).

Earlier this year, HCI said under its oil and gas exploration investment, “Impact will own 9.5% of the block with HCI owning 50% of Impact”.

This meant that HCI's exposure was 4.75%.

“AEC recognised $135 million in downward fair value adjustments on its investment in the Block 11B/12B prospect offshore the South African south coast following the reassessment of its valuation model.

Major shareholders in HCI include Southern African Clothing and Textile Workers Union.

The JSE-listed group has investments in hotel and leisure industries, interactive gaming, media and broadcasting as well as transport, mining and properties.